New regulations for ride-hailing services go to the Kansas City Council

Kansas City would lower its fees and relax some rules to accommodate ride-booking services like Uber and Lyft under new regulations submitted Thursday.

The City Council is expected to debate those proposed regulations next week, with Uber and Lyft reacting differently Thursday to the draft.

“The Kansas City ordinance remains full of unworkable provisions that reflect a misunderstanding of how the ridesharing industry works,” Uber spokeswoman Jaime Moore said in an emailed statement. “Applying taxi-like regulations to UberX will prevent drivers from meeting the skyrocketing demand for rides in Kansas City.”

But Patrick McInerney, a lawyer who has been negotiating with the city on behalf of Lyft, had a different take. Although the proposal is not perfect, he said, “it’s certainly closer to what we have in mind. … It’s moving in the right direction.”

The city has pondered for months how to regulate new ride-hailing services where passengers use a smartphone app to summon drivers. The companies argue that their business model does not fit the traditional taxi regulation scheme and that they shouldn’t be subject to costly permitting fees because their drivers use their own vehicles and often drive part time.

But city officials have said they need to ensure that the services provide adequate insurance, vehicle inspections and driver background checks.

City Manager Troy Schulte said the city has compromised about as far as it can go.

“It’s probably the best we can accomplish without complete deregulation,” Schulte said Thursday. “We’ve reached a balanced approach that tries to be fair to all sides and maintain public safety.”

An earlier draft of the regulations called for dropping the annual vehicle permit fee from $300 to $250. The version introduced Thursday still would charge individual drivers $250, but if a company such as Uber wanted to pay an annual fee of $10,000, that would drop the driver’s cost to $150.

The annual city vehicle inspection fee of $44 also would be eliminated, and drivers could just submit proof of a state vehicle inspection.

Schulte said he knows other cities have lower fees, but he wasn’t sure how Kansas City could drop its fees any further. He pointed out that Regulated Industries — which inspects taxis, liquor establishments and a host of other businesses — is completely fee-supported, without general taxpayer dollars.

The current proposal is projected to be revenue neutral because while individual fees are lower, more drivers are expected to seek permits for the burgeoning industry.

While the debate has percolated since last summer, Uber has continued to operate in Kansas City. Lyft suspended operations in October. But Uber has become increasingly frustrated, and Uber Missouri sent out an email last week telling supporters that the city’s focus on antiquated regulations could “end our ability to operate here.”

The email appealed to supporters, saying, “Regulation is needed, but the mayor and KC City Council should throw out the current draft and take a fresh approach.”

McInerney said Thursday that Lyft has had a good dialogue with the city and hopes to negotiate a good result that allows the company to resume Kansas City operations soon.

This story was originally published March 19, 2015 at 5:16 PM with the headline "New regulations for ride-hailing services go to the Kansas City Council."